Xilinx slumps after revenue warning

Decline much steeper than originally forecast

By

DeborahAdamson

SAN JOSE, Calif. (CBS.MW) -- Xilinx shares fell more than 5 percent Wednesday after the maker of programmable logic chips said that first-quarter revenue would be 32 percent less than the previous quarter -- a much larger decline than the company originally had forecast.

Shares of the San Jose, Calif.-based company
XLNX, -0.28%
fell $2.35 to $41.51 in morning trading.

Xilinx, a maker of programmable logic chips, said Tuesday that revenue for the first quarter would be 32 percent less than the previous quarter - a much larger decline than the company originally had forecast.

Xilinx blamed weakness in its "turns" business - where customer orders are booked and shipped in the same quarter. In the current economic environment, Xilinx said its turns business had been taking up a larger portion of total revenue.

Turns bookings were 53 percent in last year's first quarter.

The company also warned that the gross margin will fall to 52 percent, as the sales mix shifted towards lower-margin products.

In last fiscal year's first quarter, the gross margin was 62 percent.

Analysts polled by First Call/Thomson Financial expect Xilinx to report a 15-cent profit for the first quarter.

In the fourth quarter, the company recorded earnings of 19 cents a share on revenue of $407 million. At the time, Xilinx had forecast a revenue decline of 15 to 25 percent for the first quarter.

The full earnings report will be released after the market's close on July 19. At that time, Xilinx will provide its second-quarter outlook.

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